US embassy cable - 05LIMA3807

C O N F I D E N T I A L LIMA 003807 
 
SIPDIS 
 
E.O. 12958: DECL: 09/01/2015 
TAGS: PREL, PE, CI 
SUBJECT: DEVELOPMENTS IN PERU'S RELATIONS WITH CHILE 
 
REF: A. SANTIAGO 1551 
     B. LIMA 2226 
 
Classified By: D/Polcouns Art Muirhead for Reason 1.4 (B, D) 
 
1. (U) The Peruvian Ministry of Foreign Relations has posted 
several items on its website documenting Foreign Minister 
Oscar Maurtua's 8/23 visit to Santiago.  Maurtua called on 
GOC officials, including President Lagos and Senate President 
Sergio Romero, as well as an extensive working meeting with 
Chilean FM Ignacio Walker.  The highlights of the 
Maurtua-Walker meeting reportedly were the signing of an 
agreement on transfer of pension funds (said to be of 
potential benefit to 40,000 Peruvians residing in Chile); the 
creation of a "Peru-Chile Social Integration Council" 
including Peru's Ministers of Education, Health, Labor, and 
Social Development, plus their Chilean counterparts; and the 
signing of a 39-point Joint Declaration (also posted on the 
website) documenting the issues discussed during the working 
session.  Contrasting the existing Foreign Affairs/Defense 
consultation mechanism (Ref A) with the new Social 
Integration Council, Maurtua noted that, "From the 
traditional 2 2, we have evolved into a 4 4." 
 
2. (U) At their press conference, the two Ministers 
re-emphasized the themes addressed in their working session. 
Both spoke out in support of energy integration and the 
development of a South American gas pipeline network.  Walker 
referred to energy integration as one of three priorities 
within the larger context of advancing toward a South 
American Union, the other two being infrastructure creation 
and development of a free trade zone.  The Ministers were 
also questioned about Peru's insistence on redefining the 
maritime border, and essentially agreed to disagree, with 
both affirming that the issue would not affect the overall 
bilateral relationship. 
 
3. (U) A less positive development, but one that was resolved 
quickly, involved the incident that took place in the 
Peruvian Congress on 8/25, following the presentation by new 
Prime Minister Pedro Pablo Kuczynski (PPK) of his proposed 
work plan.  Ronnie Jurado, a Congressman from the southern 
frontier department of Tacna, placed a Chilean flag over 
PPK's desk, flamboyantly trying to make the point that he saw 
Kuczynski as a lobbyist for Chile.  Although PPK seemed 
amused by Jurado's antics, Defense Minister Marciano Rengifo 
was not, and he angrily reached over and threw the flag on 
the floor, where it was retrieved by an usher and carried 
out.  Although Chilean officials initially expressed some 
consternation about the incident, the matter was quickly put 
to rest when Kuczynski, Minister Maurtua, Minister Rengifo 
and President Toledo all offered apologies. 
 
4. (C) Chilean Embassy Poloff Fernando Velasco told 
D/Polcouns on 9/1 that Jurado's bizarre behavior during the 
incident in the Congress had attracted only fleeting notice, 
and that the GOC had considered Maurtua's visit to Santiago 
to be generally positive, although not of major significance. 
 Velasco said that although the Chilean Embassy here was 
encouraged that the GOP seemed to be looking ahead in the 
relationship, rather than dwelling on past issues such as the 
1995 arms sales to Ecuador (Ref B), there were still nagging 
bilateral issues on which there was little progress.  Besides 
the maritime border matter, Velasco cited threats to LAN Peru 
Airline's permit to operate here, an investment dispute over 
the closing down of a Chilean-owned pasta factory on 
environmental grounds, and doubts as to whether the GOP has 
the political will to engage in serious free trade agreement 
negotiations with Chile. 
 
5.  (SBU)  COMMENT:  Any positive movement in 
Peruvian-Chilean bilateral relations is welcome after the 
temporary freezing of ties earlier this year (Refs).  New 
Foreign Minister Maurtua's visit to Santiago, his first 
official trip after taking office, demonstrates the priority 
that the GOP is placing on improving relations with its 
southern neighbor.  The prompt rejection of Congressman 
Jurado's inflammatory action by President Toledo, Prime 
Minister Kuczynski, Foreign Minister Maurtua and Defense 
Minister Rengifo is further evidence of the administration's 
determination to keep bilateral links on an even keel.  END 
COMMENT. 
STRUBLE